Business Opportunities in Nepal

NEPAL, OFFICIALLY THE FEDERAL DEMOCRATIC REPUBLIC OF NEPAL, LIES BETWEEN THE TWO MOST POPULOUS AND FAST GROWING ECONOMIES OF THE WORLD, INDIA AND CHINA. NEPAL HAS VERY GOOD ECONOMIC RAPPORT WITH HER NEIGHBORS WHICH ARE ALSO EXCELLENT TRADING PARTNERS WITH HUGE POTENTIALS FOR NEPALESE EXPORTS. WHILE NEPAL HAS PREFERENTIAL TRADING ARRANGEMENT WITH INDIA, SHE HAS VERY CLOSE ECONOMIC TIES WITH CHINA. OTHER CLOSE NEIGHBORS OF NEPAL ARE BANGLADESH AND PAKISTAN. NEPAL AND BANGLADESH HAVE BILATERAL TRADE THROUGH LAND ROUTE. NEPAL ALONG WITH BANGLADESH, BHUTAN, INDIA, MALDIVES, PAKISTAN AND SRI LANKA ARE THE SEVEN MEMBER COUNTRIES OF SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION (SAARC). THE SAARC NATIONS HAVE FREE TRADE AREA UNDER THE SAARC FRAMEWORK.

MAP OF NEPAL

Nepal lies between two of the fastest growing economies of the world, India and China As a least developed country, Nepal is entitled to preferential treatment in a number of rich markets. Two other advantages, according to investors already in Nepal, are a low-cost and non-hostile workforce and a small and accessible bureaucracy. The natural as well as cultural assets of Nepal offer very substantial opportunities to investors. The country has a range of climatic conditions - from the tropical to the sub-arctic - and a terrain that is mountainous in the north, hilly in the middle and near sea level in the south. Many niche agricultural products can thus be grown in Nepal, medicinal herbs and high-quality tea being but two examples. There is huge potential for hydropower.

About 44,000 MW is thought to be economically feasible, which may be contrasted with about 800 MW currently being generated. Nepal has not been able to exploit much of its potentiality and the people in Nepal still face severe power shortages. In order to harness and develop hydropower, the government is encouraging private foreign investment in this sector. In the last several years, the government under competitive basis has been awarding licenses to private sector developers with over 5000MW of hydropower development in various stages of progress where well known international and domestic firms are involved. This priority sector provides great opportunities for contractors, equipment suppliers, and consultants alike.   There is scope for foreign investment in other areas/sectors also. Tourism is another area with enormous potential. Nepal has spectacular natural assets such as Mount Everest - the top of the world - and seven other peaks of 8,000 meters and higher. It also has a rich cultural heritage and a great diversity of ethnic groups with distinctive traditions: Lumbini in western Nepal is the birthplace of the Buddha, while Bhaktapur in the Kathmandu valley is a perfectly preserved mediaeval town full of Hindu temples. Tremendous opportunities exist in developing tourism / hotel projects in Nepal. Other trade opportunities include telecommunications equipment, ICT equipment, water resources equipment, and aircraft parts. The major telecom players are in expansive mode. Other upcoming opportunities also include civil aviation infrastructure, toll fast track roads, and railways. Other areas like Software Development; Leather and Textile; Pharmaceutical; Electronic and the Service Industries also carry high possibilities of foreign investment. Other sectors such as Medicinal and Aromatic Herbs; Flower and Vegetable Seeds; Floriculture and Sericulture; Processing of Spices, Coffee; Fruits and Dairy Products; Vegetable and Mushroom Farming and Tea, also carry high possibilities of foreign investment. Minerals that includes Stone and Limestone; Talc; Silica; Dolomite; Iron-ore; Oil and Natural Gas needs to be further explored.